An interview with Nathan Ansell, Director of Customer Loyalty at M&S
Marks and Spencer is one of Britain’s most iconic brands, a multinational retail brand, grounded in a deep British heritage, loved by millions the world over. Committed to making every moment special for customers through high quality, own-brand food, clothing and home products offered in 1,433 stores worldwide and online. M&S have just introduced a new loyalty programme, called Sparks. Sparks is a members’ club designed to give customers more from M&S, including tailor-made offers, priority access to seasonal previews and exciting money-can’t-buy events and experiences. It has a unique mechanic, a personalised approach and a highly differentiated approach to rewards.
By Charlie Hills
To find out more about the strategy behind this new loyalty programme, we interviewed Nathan Ansell, Head of Customer Loyalty for M&S, at the Festival of Marketing 2017.
Sparks is a truly innovative programme, rewarding members for engagement as well as spend. Please tell us about the human insights behind the creation and design of Sparks.
Sparks is 100% designed for people; a human-centric approach was always a part of the plan. It’s designed to give people more of the M&S experience they love, personalised and tailored to them. Within the programme’s construct, we have developed several strategies to make the programme more than just a loyalty programme.
- Charity: When members join the programme they are given the chance to choose a charity of their choice. We donate £5,000 every day to charities selected by our members. It was crucial to create a real personal cause. Customers really value that and it’s one of the things that members like best about the programme. So far the initiative has raised £3m for charity.
- Focus on the store experience: 90% of our transactions still take place on the high street. Despite the strong online growth, going in-store is still really important. Half our members just shop in one store and they build great relationships with the staff that work there. We have created a series of “meet the manager events,” where we invite groups of our best members in for special events to meet the team, discuss new products and services and get feedback on how we’re doing. These events have proved hugely popular and in the future, we want to do and reach much more. So far we’ve only been able to engage the top 5% of our members with events, and we want to build it over time.
- Rewarding more than spend. Spend is only one part of our members’ relationship with us. We reward our customers with Sparks for spend (every £1 they spend and also every time they shop), but also for writing reviews and shopping with us. Thinking holistically is really important to us.
What approach to do you take to developing and managing customer insight for Sparks?
Leveraging our data and what we know about our customers is critical to success, not just for Sparks but across the entire team at M&S. I’m really clear that my team cannot be the arbiter of information – that’s something that everyone does. It should be 10% of everyone’s job, not 100% of one department.
At M&S we use a “DIAL” model:
- Data: Having great customer data, well harvested and maintained. We use about 9 different segmentation models.
- Insight: Finding insights that are of commercial value.
- Action: An action oriented approach, continuous testing and learning. At any one time, we have about 50 tests in progress.
- Loyalty: Customer lifetime loyalty is the outcome we seek, but the L also stands for like for like growth and learning – every action we take should create learning for us to feed back into our data platform in order to make things better for customers
To improve the programme we are building a sophisticated learning programme, for all customer encounters. The learnings are then used to strengthen the proposition. Everything is underpinned by robust data and analytics (qualitative and quantitative).
In your presentation at the Festival of Marketing, you talked about both customer value and business value. Which is the most important?
An argument between customer and business is not an argument. Do right by the customer and you will do right by the business.
Sparks enables us to do 3 things for our customers, and for our business:
- It helps us learn who our customers are, who the most valuable and most vulnerable are, what matters to them and how to engage them
- It helps us communicate with our customers through multiple channels, and get the right permissions to do so.
- It enables us to study what our best customers are up to, and harvest insights for the business.
A great example of joint customer and business value is our thank-you programme. Last month we offered members 20% off home, clothing and beauty. Great value for them, great value for M&S. We also run “try this” offers – to entice trial in new categories.
Sparks has an interesting benefit and rewards strategy; offering a mix of tailor-made offers, priority access, events and experiences to members. What works best?
We meticulously analyse Sparks’ benefits and rewards – using a mix of research and hard analytics, primarily looking at redemption data to see what’s working best. Our ambition is to create benefits that offer economic and emotional benefit for our members.
We tailor the benefits to the different segmentations we use. Of our own M&S benefits, the big offers, instore events and priority access have provided immensely popular. We are always looking to work with partner brands too. Partner rewards are very effective within Sparks. For example, we offered private screenings of Paddington Bear 2 for families, and we do a lot with the England Football Team for our members who love the great game.
We try to make sure there’s a good mix of benefits for everyone. We are looking to expand how we work with partner brands in the future.
What comes next for Sparks?
We are seeking to build on our strong foundations. Loyalty is changing globally; it used to be something separate to a brand’s marketing strategy. Now it’s part of people’s brand experience. That’s here to stay.
We have 3 key priorities for the immediate future:
- Contextual Relevance: Being useful to our members in the moment that they need us. It is the ultimate in personalisation. For example, we know that life stage is a really important marker for members’ relationships with M&S. Being present and available in all life’s memorable moments creates synergy, making it a more emotional We notice that customers will jump into M&S at particular moments. For example, when they start a family or get their first job. We want to be there when our customers need us.
- Engaging the group: People are part of a “tribe” – our members think about things as part of a unit, they do things together. Building and leveraging community is essential for us.
- Offering the best for our members: Continuous focus on delivering the best, most relevant member experience, fuelled by insight is key. Across every customer interaction and every benefit offered.
What advice would you give to a brand considering developing a new loyalty programme?
- Start small. One of the things that took us a bit by surprise, is how quickly customers took it up. We got to 2m members in a couple of weeks, we are now at 6m members and continuing to grow fast.
- Plan ahead. Consider what data sources you will require in the future and make you’re your programme architecture delivers the data you need to get insights for the future.
- What you need. Think about what technology you really need in order to deliver what you want to promote your customer.
Charlie Hills is Managing Director and Head of Strategy at Mando Connect.